The Philippines and Singapore have strengthened their fintech relationship through a number of cross-border collaborations that will strengthen ASEAN regional payments and provide financial inclusion to Overseas Filipino Workers (OFWs) and micro-small-to-medium-sized enterprises (MSME) (MSMEs).
Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) and Managing Director Ravi Menon of the Monetary Authority of Singapore (MAS) signed the expanded Fintech Innovation Function Cooperation Agreement during the recent World Fintech Festival Philippines (WFF) 2021 – Singapore Fintech Festival (SFF).
The integration of the two countries’ QR and real-time payment systems was one of the highlights.
“The BSP is taking the first step in linking the Philippine payment system with those of our ASEAN neighbors, beginning with Singapore,” Gov. Diokno said after the signing ceremony, adding that the agreement will enhance safe, efficient cross-border payments through smoother and seamless international fund transfers. Managing Director Menon called it “a concrete step towards the vision of an ASEAN network of interconnected real-time payment systems.”
Proxtera, which enables seamless trading for SMEs; APIX, a non-profit open-architecture API Exchange that supports ASEAN and global financial innovation and inclusion; and Oxygen, APIX’s knowledge-upskilling platform that provides masterclasses from industry experts, are all regional tech platforms launched by MAS to support the growth of ASEAN cross-border transactions.
The discussions at SFF 2021 are shaped by new changemakers, as well as impact-makers, policymakers, and financial gurus from central banks. One benefit of this approach for MSMEs, according to MAS Chief Fintech Officer Sopnendu Mohanty, is that “we are democratizing the unique and valuable content into a signature knowledge certification program and a special SME day with an upskilling program.”
Amor Maclang, Digital Pilipinas Convenor, expressed support for the enhanced BSP-MAS Cooperation Agreement through “the whole-of-society approach in solving today’s and tomorrow’s technological needs.” Digital Pilipinas, which helped launch WFF 2021 with the MAS, will “continue to be at the service of both the BSP and MAS as this agreement is a very important pillar in tech-ing up our country,” said Maclang.
Tech education and certification
Digital Pilipinas is a national movement that uses digitalization, tech education with certification, and the creation of industry sandboxes to address industry-wide challenges in the Philippines. Business Without Borders, a program supported by the Department of Trade and Industry, and a partnership with Proxtera will connect SMEs to the larger ASEAN network. The upcoming Digital Pilipinas Academy will offer educational micro-certification courses on the blockchain, as well as courses on Open Finance, Fintech, and other emerging technologies through its academic program, the Incremental Industry-Driven Technology Education Resources Authentication Testing Ecosystem (I-ITERATE).
The sandboxes that Digital Pilipinas will develop with national line agencies will be guided by the BSP and MAS models, allowing them to accelerate innovation while adhering to regulatory policies. Proxtera, APIX, and Oxygen are Digital Pilipinas’ partners in this initiative.
Safe, secure, and swift digital payments
Digital Pilipinas will put plans for tech-ing up entrepreneurs and connecting MSMEs with international trade into action through Business Without Borders. Its opening of the ASEAN market to local companies via digital gateways is consistent with the updated Cooperation Agreement between the BSP and MAS.
The updated Cooperation Agreement, which builds on an earlier 2017 agreement between the BSP and the MAS, will also benefit the tourism, payments, and cybersecurity sectors. The 2021 agreement, according to Raymond Estioko, BSP Director for Payments System Oversight, will make cross-border payments “cheaper, more inclusive, and more transparent.”
Another new development, according to BSP Assistant Governor Edna Villa, is “collaboration specifically on payments innovation and the linking of the two payment systems of the Philippines’ InstaPay and Singapore’s PayNow.”
“Allowing them to connect to the new payment systems can help drive financial inclusion, which can benefit OFWs in their decisions about which insurance product fits their needs,” said Todd Schweitzer, CEO of Brankas.”
Carmelita Araneta, General Manager of Philippine Payments Management Inc. (PPMI), acknowledged that economic and tech “power is starting to move in Asia.” Their P2M (Person-to-Merchant) system is designed to connect with Singapore-based OFWs who are Instapay users.
Leila Martin, President and CEO of OFBank, acknowledged that through the new BSP-MAS digital payment network, OFWs “can look forward to a strong, enabling environment that will ensure that cross-border payments are safe and devoid of fraud.”
The BSP-MAS Cooperation Agreement Extension and the new Digital Pilipinas partnerships are expected to spark more collaborations across ASEAN. According to Maclang, “they will help accelerate cross-border financial transactions between the Philippines and Singapore, and move Philippine industries forward toward ASEAN economic integration.”